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“any tips or guidance on becoming a landlord?”

by Prince Of Petworth March 28, 2017 at 2:30 pm 30 Comments

landlord advice
Photo by PoPville flickr user Joe Flood

“Dear PoPville,

I am planning to rent out my condo in upcoming months. I’d prefer not to use a management company if I don’t have to as I’ll still be living in the city. I was wondering if your readers have advice or recommend resources for a first time landlord. I want to make sure I do things by the book to protect my home and respect prospective renters. Any feedback is appreciated. Thanks!”

  • Mike

    I’m considering doing the same in the next year or so, so this’ll be a good one.

  • condoer

    I recently did the same thing. I manage it myself. I used rent jiffy to do all the paperwork to make it legal (you can do it all yourself and save some $$, but for me it was worth it to use their services). I also priced mine a bit below market so I had a lot of interest and a big candidate pool to choose from. Did credit and background check (also using some online service I can’t recall). Used another online service for the lease. You can get free ones, but I paid $30 for one that included all the required disclosures. Oh, and make sure you give the tenants a copy of any condo bylaws/regulations so they’re on notice to follow them. Then cross your fingers and hope you get a good tenant who will stay for a while!

    • Anon3

      I did much of the same thing – used RentJiffy to get the inspection and BBL done, well worth the money. Made some updated to make sure it met DC requirements – e.g. hardwired alarms. Listed it a little below market. In my case, its a 4 BR row house, and it’s been rented for 5 years now with great tenants. I do thorough screening of the tenants -credit check, criminal / eviction history, landlord and employer refs etc. I use an online service for the credit and criminal checks. I do get some turnover, since it’s several people on the lease- so i end up doing lease amendments from time to time when someone leaves and a new person comes in. Usually the tenants interview and select the new person, and then i handle the paperwork to make sure they qualify (i.e. have good credit, enough income, etc.) to take over. I think I rejected only one person in last 5 years – the guy did not have a credit score at all, and his barely sufficient income was not verifiable. I also use a direct deposit service to collect the rent.

  • bhallmark

    Hi, I’ve been successfully renting out my condo since 2012. I’ve learned a lot along the way. The first thing you really want to do once you’ve decided to take the plunge is to get a basic business license w/ the District. They seem to have changed the process a bit but I think you start here: https://mybusiness.dc.gov/#/. Anyway, don’t do a non-legal rental. If you ever have to go to court because of a tenant (for non-payment of rent or anything else) you’re on shaky ground if you have an illegal rental (you might be on “no ground”). So it’s worth it to go through the process of obtaining your basic business license and then scheduling the home safety inspection. Others here may have more recent experience with the new portal the District has set up to do this.

    I also found Zillow Rental Manager to be helpful. I list my unit there in addition to craigslist and the responses from Zillow are far less flaky. Listing on Zillow gets you into several websites at once, as well (hotpads, apartments.com, etc.). That’s really helpful if you figure out you have better photos or want to change the rent – you won’t have to update all the sites individually. They also have good tips for new landlords and even webinars.

    When you’re ready to advertise, photos and descriptions are important. Large and clear photos, with a calm but upbeat and slightly sales-y description is best. Leave the all caps and abuse of punctuation to the desperate companies trying to fill their empty units (NO RENT FOR THE FIRST YEAR!!!!! MUST SEE TO BELIEVE!!!!! LOOKING FOR THE BEST MOVE??????) Those listings don’t attract the renters you’re probably looking for. Limit your capitalization to initial caps, and no more than one exclamation point at a time, please, ha.

    Stay consistent. Don’t list your place on craigslist with a different description or (shudder) price point than you did on Zillow or somewhere else. The same handful of people are looking in lots of different places. You’ll just give the impression that your rent is negotiable (it may be, but you don’t have to advertise that) or that you’re not in control of your listing. If you let that slide, a prospective tenant might wonder, what else will you let slide?

    Photos – generally, wait for a sunny day and take one clear photo of each room. If the room warrants more than one photo (some do), go for it. But I don’t need to see 6 photos of someone’s dining room table (true story). Sparsely furnished or decorated is best but you may not have that luxury. If you can, post your photos in sequence of how you might walk through the unit so people understand the space and layout better.

    Now that I’m typing this I actually have a lot more tips but this post is getting huge. I don’t post here a lot so I’m not sure if you have a way of emailing me but let me know if you want any more info offline and maybe we can find a way to connect.

    Also, for the record, I’ve yet to find a single management company that is worth what they take each month. It’s a tough business in that their fee is usually a huge hit to the homeowner but kind of paltry for the manager. So they have to manage a lot of properties for it to be fruitful for them. I guess what I’m saying is, since you’re prepared to do it yourself, you’re ahead of the game. Good luck!

  • A rental property owner

    Screen them (conduct a background check, call past landlords and current employers and run a credit check). Screen them as much as legally allowed. As the owner of a rental property, you have fairly broad leeway in picking and choosing your tenants. If you choose poorly, it can be incredibly difficult to get them out, even for non-payment. There are lots of screening services available for relatively small fees, which you should transfer to the applicant include as the cost of applying for a lease.

    You cannot discriminate for the following: ace, color, national origin, sex, age, source of income, religion, marital status, sexual orientation, family responsibilities, parental status, personal appearance, physical handicap, political affiliations, place of residence or business, or student status. However, you sure as sh*t can discriminate on whether or not they have a history of paying their rent, have good/bad credit score, have steady employment, and have a good/bad history of being a renter.

    If you happen to have multiple people applying for the same property, you get to choose the manner by which you make the ultimate selection. Some might choose ‘first-come first-served,’ others might choose to seek to increase the rental price, others might choose to discriminate based on their rental history, payment history, credit score, and employment history, or some mix of them. That part is up to you.

    If you do reject someone based on credit score, you’re required to provide them a formal letter of explanation. If not, you can basically tell them to pound sand.

    The laws in DC are set up to protect the renter. You need to do everything possible to protect yourself before you get into a situation where the renter has the legal upper-hand.

    You also should get a rental license; https://dcra.dc.gov/service/get-one-family-rental-license It may come in handy should your future tenant complain to DC government in the future.

  • Emanon

    A couple small things…

    Be sure to include a Waiver of Notice in the lease. Without it, even after tenants are late on rent, you’d still have to give them 30 days notice before filing for eviction. But if you include a waiver of this notice in the lease, in DC, you can file as soon as they’re late. It’s such a long process, might as well do what you can do make it easier on yourself.

    As someone else mentioned… do background checks. There are websites out there that will automate the whole process for you. I got a good suggestion once for this… You do the background check last, for tenants who decide they’re interested. And you tell the prospective tenant that they have to pay for the background check, but that if it’s clean and they sign the lease, you’ll deduct the cost of the check from the first month’s rent.

  • textdoc
  • Anon Spock

    I took photos from the corners of the room with all but the furnishings to remain pushed out of view. This made my place seem more spacious and responses increased. Mention proximity to grocery, metro/bus, dining. Keep it short but somewhat detailed.
    I use a manager but find my own tenants; although I’m local, and I’ve found that to be preferable. I’m frequently busy, and I don’t want to waste my time meeting repair people. I self-managed at first, butt I switched after a year or 2.
    If someone gives you a bad vibe, I wouldn’t select them even if they’re good on paper.
    On the condo side, make sure the board/pm gets contact info for tenants. Issues are rare, but if there is an emergency it’s nice to have.

    • textdoc

      “I took photos from the corners of the room with all but the furnishings to remain pushed out of view” — Not sure if I’m reading this correctly… so you left the furniture where it was, but pushed random other stuff/clutter out of view?

      • Anon Spock

        Yes. I kept the bigger items in place and moved everything else out of view and made sure counters were clear.

  • John B.

    Look up the person on the web, and on social media. There’s a lot of information out there and it’s amazing what people will post for the entire world to see and this can give you a pretty good idea of their character. (This is of course easiest if they have a somewhat unique or unusual name.) My husband and I have ruled out more than one potential tenant based on things that we’ve found online.

    • Anon NS

      Also run DC case search and MD case search. The courts in those two states list all the cases online (including landlord tenant, criminal, and debt collection actions), and the public can search online for free. Just go to the website.

  • geep

    Use cozy.co for super easy listing/syndication, credit checks, background checks and electronic rent collection. All free and it is awesome. I have a few rentals and this makes life a little bit easier.

  • Anonymous

    I don’t know if anyone’s talked about showing the property, so here’s my two cents:
    .
    Make appointments only with the most favorable prospects. Hold an open house for everyone else, with a two hour window. Or have two, one on an evening and one on a weekend morning. Let people know it’s an open house so they know others might be there. Turn on every light in the unit and make sure the place is immaculate.
    .
    Have a couple applications handy, but most people will expect you to email them, so have interested parties email you if they want to move forward.
    .
    Let them know you’re the owner and live nearby. Many renters are tired of dealing with management companies and there are benefits to renting from an individual. E.g. I’ve saved every one of my tenants lock-out fees when they inevitably forget their keys — and they all do. Every.single.one.
    .
    The higher your rent, the smaller your pool. You will give yourself many more applicants to choose from if you reduce the rent $50-100 — and also have better quality prospects — than at a higher rent. If you have only one applicant, you just lost your ability to be selective.

  • Allow pets if you can. Pet owners are grateful to find a place and make better tenants. You can ask for a pet deposit against damage, but I think a monthly pet “rent” is beyond the pale.

    • textdoc

      “You can ask for a pet deposit against damage” — This topic has come up here before, and my recollection is that D.C. law doesn’t permit landlords to require any sort of deposit from the tenant other than a security deposit. So, even though a pet deposit might be fairer than charging pet rent, landlords don’t have that option.

      • bhallmark

        I believe textdoc is right. DC landlords are not allowed to collect more than one month’s rent as a deposit, i.e., you can’t ask for the first and last month’s rent upfront as a deposit, a common practice in NYC. Even if it’s for something specific like pet damage, I’m pretty sure it’s not legal. A nominal pet rent is probably the way landlords hedge against damage since they can’t ask for an additional deposit.
        Victoria, I agree that pet owners (I am one) are grateful to find a place as DC can be tough.

        • JoDa

          This is correct. Deposits in total are limited to one month’s rent. Non-refundable fees and rent additions (pet rent) are acceptable. I’ve only had a few pet owners as tenants, and they were responsible owners, so I haven’t felt the need to impose pet rent or fees. Take the advice above about pricing slightly below market and you’ll have your pick of tenants most likely, so you can avoid people who can’t prove they are good pet owners (the few pet owners I’ve had volunteered their vet and dog walker/cat sitter’s information up front, one included their trainer’s info…always a good sign; then you also call previous landlords and ask specifically about the pet).

    • realtor

      Pet deposit’s are legal as long as the pet deposit + security deposit is not greater than the rent. So you can charge a pet deposit but you would have to lower the security deposit, so theres honestly not much sense in doing so.

    • Anon

      I once wrote my pet deposit as something along the lines of an additional deposit in excess of the one month’s security deposit, but if the tenant seeks to assert that the pet deposit is void in violation of [whatever the DC rule is that you can’t charge one month’s rent as deposit], or a court otherwise determines the same, then the pet deposit shall automatically convert to a one-time non-refundable pet fee in recognition of the additional wear-and-tear placed on the property by animals. Since pet fees and additional pet rent aren’t prohibited.

      I just want to be able to give the tenant their money back if their pet doesn’t pee everywhere or claw my stuff, while also making sure I have 30 days of rent in the bank if the tenant (rather than their pet) is irresponsible. But if the tenant wants to get smarmy and say I can’t collect that much as a deposit, I’m happy to keep it as a pet fee. Never tested in court.

  • kwillkat

    Use a reputable real estate agent and you will be ahead of the game from the start. It will cost you one month rent but I found the money well spent in the long run. The agent will market, show, screen, help you select, put together a solid lease, and he/she typically knows the trick to finding a good quality tenant. It is also helpful to have a certain arms-length, at least in the beginning. Also good advice above about getting a business license from the get-go. The inspection process will help you identify any potential issues that may come up later. Being totally professional from the start means the tenants will take you more seriously and you ultimately should have far fewer issues.

  • bhallmark

    Oh, and I know I’ve already used up all my space (man that was a long post – sorry guys), but you should also be prepared for a spanking new and heavily increased property tax bill to go along with your new income. You’ll lose the homestead deduction right quick.

  • Easyenough

    You are probably past this point already, but I just wanted to throw this into the conversation: There are good and very complex tools for figuring out the financial opportunity cost or benefit of renting v. selling. I just spent a few hours with a 40 variable web tool and despite having a low mortgage and being in a desirable area, the math just didn’t make sense for me. After reading a lot of blogs, it seems like in most high-priced urban areas like DC, the pro/con of renting really depends on tax treatment (cap gains v. income) and need for diversification – not cash flow or internal rate of return. I was surprised enough by the math that I’m listing my (vacant) rental for sale in the next couple weeks. Of course, this all depends on your particular set of requirements.

    • MadMax

      The problem with selling is that depending on how long you’ve owned your property you can typically only make a small return, whereas renting you can make a much larger sum basically in perpetuity (especially once your property is paid off basically by the renters). They ain’t making anymore land, there’s no way I would ever sell in DC.

  • anonymous

    One thing to keep in mind is that your tenants will have first right to your condo if you ever decide to sell it. This can sway potential buyers if they are familiar with this situation. We were the buyers in this case, and the whole closing almost didnt happen b/c the tenants didnt sign off their rights till the day before the closing. We later decided to rent our basement, but not to full-time tenant, but via AirBnb. You still need to get business permit and DCRA inspection, but since they are only renting for short period of time, they have no tenant rights. Plus you’re not stuck with a tenant for a long period of time if you dont like them for any particular reason.

  • Anonima

    Honestly, I’ve loved renting out my basement. I have my BBL and manage it myself. Have the D.C. Landlord tenant agreement (on the web) and make sure to choose whatever candidate you feel most comfortable with. If you find the right people, it’s an easy experience with a great upside. Good luck!!

  • When my wife and I were looking to move to DC from VA, our realtor told us we could NEVER rent our place in DC. “You want to rent in DC, you should just give them the keys and walk away”.

    Our experience hasn’t been nearly that bad, but you should be wary. Laws in DC very strongly favor tenants, which is great for DC residents and not so great for DC landlords.

    One bit of advice that i haven’t seen here yet – trust credit reports. Many people have bad credit and a great explanation, perhaps even a really moving story about why their credit is so bad. Let them be someone else’s problem. Renting your place is a business and you should treat it like one. The only bad tenants I’ve ever had in a decade as a landlord are ones I didn’t think I should rent to and then felt bad for them.

    Also, check your condo bylaws – there may be rental restrictions (6 month minimum lease, extra condo fee, no more than a certain percentage of units in the building can be rentals, etc).

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